Duty reviews: how will they affect you? - BikeBiz

Duty reviews: how will they affect you?

BikeBiz gathers some industry insight into the various outcomes of duty reviews
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In July the EU will make a decision on whether to continue, alter or abolish tariff charges on Far East bicycle imports. Mark Sutton talks to a number of industry insiders about the likely decision and how the trade is preparing for every possible outcome…

“My view is that there is a 50/50 chance that dumping duty will be removed partially, or completely. The case for keeping it is much weaker than five years ago.
“The removal of the Vietnam dumping duty would have no immediate impact on Avocet's business, though removal or significant reduction of dumping duty on Chinese bicycles would impact on higher ticket products, certainly. For this reason I have spent five weeks in the Far East renewing old friendships and contacts – specifically Taiwanese high-end manufacturers with factories in China, just in case the duty is removed.
“Because of our special relationship with our Bangladesh manufacturers we’re unconcerned about being competitive in the middle price ranges of complete bicycles and we have excellent sources for kids' bikes, which can compete with China.
“The only concern is on bikes over $250 FOB value, as it is difficult to get GSP Form A on this level of product. China can do this and can now produce acceptable quality products. If dumping duty is removed we will look at sourcing such products from China. The main point is that the business is prepared for the possibility.
“The Far East will continue to be the major supply zone for components, complete bikes and aftermarket accessories for many years to come, in my opinion.
“Countries such as Bangladesh will of course grow their market share, but the biggest percentage by value and volume will be Far-East sourced. The infrastructure is too far advanced now for any significant changes.
“I personally believe the time is right for bikes retailing over £300 to be built in the UK again and I would not be surprised to see that happen some time in the near future.”

Steven Walsh, Avocet

“I personally cannot see the dumping tariffs being altered or removed. The EBMA will be strongly campaigning for the duties to remain as they are and I believe it will be successful in relaying this to the EU. European manufacturers will be
behind Brian Montgomery and his efforts.
“As for some firms skipping round charges, as has been the case several times in the past, from a manufacturer’s point of view it’s really not worth the risk to avoid doing things exactly by the book. Last time HM Customs saw foul play, several manufacturers in both Taiwan and Europe were investigated and punished for attempting to exploit ‘loopholes in the law’.
“Should there be any changes in charges, I feel that in some way or another the Far East would power on, despite the inevitable price rises. Taiwan’s manufacturing businesses have been at full steam for some time now. Even if changes in the tariffs did materialise, I’m doubtful business would slow.”

Steve Fenton, Pro-Lite

“Duties can have a fairly dramatic impact on a trade. One recent example is the dual anti-dumping and countervailing duties that the EU imposed on US biodiesel in 2008. Since then, EU imports from the US have fallen drastically while EU imports from other countries have surged.
“Another example are textiles and shoes: since the EU bra wars, there's a constant threat of new measures being imposed on Chinese textile imports. The result is that importers and retailers have got used to very diversified sourcing. None dare to put their eggs into any one basket in case there's a sudden tariff hike.
“Some people (Chinese shoe makers, mainly) will tell you that imports of Chinese and Vietnamese shoes have plummeted since duties were imposed in 2006. Others will tell you imports have not fallen, but that High Street prices are up. Yet again, others (Italian shoe makers) will tell you there's been no change, because retailers can absorb the extra price rather than hand it on to consumers.
“What seems to be a recurring argument – and one that seems plausible – is that in many cases, duties damage imports from the specific country (China and Vietnam in the case of bicycles), but don't necessarily benefit European producers. This is because importers simply set their sights on other low-wage countries, such as Indonesia, Cambodia and India.”

Juliane von Reppert-Bismarck, MLex market intelligence

“In my opinion, abolition of the duties could monumentally shift the manufacturing landscape. The whole industry would have to review its sourcing strategy. Those firms that react to the changes best will have the upper hand. Abolition would, without doubt, open up the market to other factories. Come July 15th, when the decision is made, the EU trade may be looking at China as a significant supplier of complete bicycles.”
Russell Merry,
CSG

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